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Thursday, October 04, 2007

Electric Infrastructure

Coming from a part of the energy industry more focused on molecules than electrons, I don't claim to understand all the intricacies of the electricity transmission business. I heard from more than one attendee at last week's Herold Pacesetters Energy Conference that transmission is a critical and under-appreciated element of solving our energy problems. That rings true. Among other things, expanding the existing transmission network is essential for delivering the large quantities of wind energy needed to meet the growing web of state renewable portfolio standards (RPS.) But under what circumstances should new long-distance lines be built, and when should that take place over local opposition?

A few years ago, it was trendy to suggest that distributed power would soon render long-distance, high-voltage power transmission obsolete, with the coming "smart grid" relying more on small generation close to the load, and less on big central power plants far away. I would have been in that crowd, back when I was convinced that home fuel cells were about to become mass-market. But while rooftop solar is making inroads in that direction, and could someday cover a big chunk of peak residential and business demand, distributed power today is a niche application that only substitutes for the grid on the smallest scale.

My local utility, Dominion Power, is seeking permission to build a new line to bring power into Northern Virginia from Pennsylvania and West Virginia, traversing the rapidly-growing counties of DC's outer ring of suburbs and some historical sites. (I'm learning that you can't go far in Virginia without encountering a historical site.) Yesterday's Washington Post reported that the Federal Energy Regulatory Commission (FERC) had declared the Mid-Atlantic region, including the national capital region of DC, MD and VA, as a National Interest Electric Transmission Corridor. That could lead to Dominion being given powers of eminent domain to obtain the necessary rights of way. Dominion has indicated it will not seek federal assistance and would continue to work through the state's process. Ironically, development is driving the need for more power in the region, but the impact of new power lines on the development potential of the land they would cross is an underlying cause of much of the opposition--along with concerns about the unconfirmed health impacts of high-voltage power lines.

In California, which implemented an aggressive RPS, accessing much of the state's wind resource for power generation will require new transmission lines. Until recently, the big question was who should pay for this. The state Public Utilities Commission ruled in June that it was in the public's interest as ratepayers to provide the up-front funding for power lines to connect these renewable sources to demand. Otherwise, the first wind developer in a new area would have to pay for the entire cost of the line, harming the economics of the entire project and potentially derailing it.

Installing new high-voltage lines to enable renewable energy supplies is quite different from doing so to ensure a reliable supply of cheap electricity, although I suspect that Dominion's management and most of its customers would agree that the latter phrase describes the company's primary mission pretty well. Customers whose property values are affected or who have a special interest in preserving the history and scenic beauty of the region would doubtless disagree, and if the line were going through my neighborhood, I'd be less than thrilled, myself. My regular readers are probably anticipating my usual anti-NIMBY stance, here, and they'd be right, if it were clear that Dominion had been doing all it could to avoid the necessity for this project.

Californians already pay high prices for power, with residential pricing steeply tiered and top rates hitting $.30/kW-hour. They have significant incentives to conserve and invest in efficiency. Meanwhile, I'm paying under $0.10/kWh here, all-in, and the payouts on installing more efficient appliances and lighting are pretty lengthy. Moreover, Virginia's electricity supply is about average in CO2, coming from a mix of coal and nuclear power. The new power line would bring in power from Pennsylvania, which has a similar emissions profile, and West Virginia, which is mostly coal-fired. So there's no argument for new power lines here to promote renewable energy; quite the contrary, I would say.

Unfortunately, the projected capacity crunch occurs in 2011, which is barely enough time to get the power lines built, let alone implement a demand-side management plan on the scale necessary to avert the need. If Dominion can't build this line, it would soon be in violation of the North American Electric Reliability Council (NERC) standards that were developed after the big blackout of 2003, and that could put the power supply for parts of the federal government at risk. Unfortunately, most of our long-distance electric infrastructure dates back to the same era in which most of our interstate highways were built, and is similarly stretched. As with other infrastructure, we tend not to appreciate it until it fails. In light of all that, I believe the best course of action would be to let Dominion proceed--hopefully without the exercise of eminent domain--but conditioned on a serious review of their rate structure and demand-side management efforts, to make sure they aren't in the same situation again in only a few years.